Quicksand Corporation has a sales budget for next month of $50,000. Cost of goods sold is expected to be 60 percent of sales. All goods are purchased in the month used and paid for in the month following their purchase. The beginning inventory of merchandise is $1,500 and an ending inventory of $2,000 is desired. Beginning accounts payable is $13,000. The ending accounts payable for Quicksand Corporation should be
A) $30,500.
B) $30,000.
C) $13,000.
D) $29,500.

Question

Quizplus · Accepted Answer

Ending accounts payable = Beginning accounts payable + Purchases - PaymentsPurchases = Cost of goods sold = 60% of sales = 60% of $50,000 = $30,000Payments = Purchases of previous month = $13,000Ending accounts payable = $13,000 + $30,000 - $13,000 = $30,000

Quicksand Corporation Has a Sales Budget for Next Month of $50,000